Working Capital Management of Market Leaders

Abstract

Considering the significance of working capital management, the current study attempts to examine various aspects of working capital management, i.e., current asset structure, liquidity, working capital policy, and working capital management efficiency as represented by working capital ratios of the BSE Listed firms for a period of twelve years from 2000 to 2012. The analysis revealed that market leaders pursue a moderate working capital investment policy whereas an aggressive working capital financing policy. Loans and Advances had the highest share in the structure of their current assets. Market leaders enjoy sound liquidity position and manage their inventories and
receivables in an efficient manner. They effectively utilize the investment of their current assets. The results of time trend analysis revealed a significant uptrend in CATAR, CLTAR, CLTDR, CASR, ALR, CBBTCAR, ITR and DTR whereas a significant downtrend in ITCAR, DTCAR, OC, and NTC.

Keywords: Working Capital, Market Leaders, Current Asset Structure, Working capital policy, Working Capital management efficiency

JEL Classification: G31, G32